Shri Ganesh Vasantlal Jariwala, Surat V. The Income tax Officer,Ward-2(4), Surat

ITA 1413/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80382 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 15-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 18-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: JIGNESH KHATRI
• Section: 143(3); 133(6); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL CHATURVEDI , A.M.) I. T. A. NO. 1413 / AHD/ 20 1 1 (A SSESSMENT YEAR: 2007 - 08) SHRI GANESH VASANTLAL JARIWALA, PROP: SHREE MA HALXMI JARI TRADERS, 2/3979, CHOGAN SERI . SAGRAMPURA, SURAT V/S THE I.T.O, WARD - 2(4) , SURAT (APPELLANT) (RESPONDENT) PAN: AFYPJ 0282L APPELLANT BY : SHRI JIGNESH KHATRI, A.R. RESPONDENT BY : SHRI M.K. SINGH, D.R. ( )/ ORDER DATE OF HEARING : 15 - 09 - 2014 DATE OF PR ONOUNCEMENT : 19 - 09 - 2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE ASSES SEE AGAINST THE ORDER OF CIT(A) - II, SURAT DATED 21.02.2011 FOR A.Y. 2007 - 08. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSE E IS AN INDIVIDUAL STATED TO BE ENGAGED IN THE BUSINESS OF MAN UFACTURING AND TRADING OF J ARI K ASAB . ASSESSEE FILED HIS RETURN OF IN COME FOR A.Y. 07 - 08 ON 18.09.2007 DECLA RI NG TOTAL INCOME OF RS. ITA NO 1413/AHD/2011 . A.Y. 2007 - 08 2 1,27,520/ - . THE CASE SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) VIDE ORDER DATED 4.12.2009 AND THE TO T AL INCOME WAS DETE RMINED AT RS. 20,71,850/ - . AGGR I E VED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A) WHO VIDE ORDER DATED 21.02.2011 GRANTED PARTIAL RELIEF TO THE A SSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS R AISED THE FOLLOWING GROUNDS: - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN LAW AND ON FACTS IN UPHOLDING THE ADDITION ON ACCOUNT OF UNRECORDED RETAIL TRADING BUSINESS OF JARI TO THE EXTENT OF RS. 5,00 , 936, WHICH IS @ 15% OF CASH DEPOSITS RS. 33,39,9630/ - IN THE BANK ACCOUNT OF STANDARD CHARTERED BANK AND KARUR VYSYA BANK LTD. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING ADD ITION OF RS. 14,677/ - ON ACCOUNT OF PROFIT ON UNRECORDED SHARE TRANSACTION. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN UPHOLDING ADDITION OF RS, 16,929/ - U/S. 69B OF THE INCOME TAX ACT. 4. ALL THE THREE GROUNDS ARE INTERCONNECTED AND THEREFOR E CONSIDERED TOGETHER. 5. ON THE BASIS OF AIR INFORMATION RECEIVED BY THE A.O , IT WAS NOTICED BY HIM THAT ASSESSEE HAD MADE CASH PAYMENTS EXCEEDING RS. 10 LACS AND ALSO MADE APPL ICATION FOR ACQUIRING SHARES FROM MORE THAN RS. 1 LAC. A.O CALLED FOR INFORMATI ON U/S 133(6) OF THE ACT FROM THE BANKS AND ON THE BASIS OF INFORMATION RECEIVED FROM BANKS, HE NOTICED THAT THE CASH TRANSACTION ENTERED INTO BY THE ASSESSEE DURING THE YEAR AGGREGATED TO RS. 54,79,900/ - . A.O ASKED THE ASSESSEE TO EXPLAIN THE TRANSACTIONS . A.O NOTED THAT THE NOTICES ISSUED TO THE ASSESSEE TO EXPLAIN THE TRANSACTION REMAINED UNCOMPLIED AND THEREFORE SUMMONS U/S 131 OF THE ACT WERE ISSUED TO ASSESSEE WHEREIN HE WAS DIRECTED TO PRODUCE THE BOOKS OF ACCOUNTS, BANK STATEMENTS AND LIST OF ASSETS . THEREAFTER STATEMENT U/S 131 OF THE ACT WAS RECORDED WHERE ASSESSEE ADMITTED THAT THE TRANSACTIONS INTIMATED BY THE BANK BELONGED TO HIM AND ITA NO 1413/AHD/2011 . A.Y. 2007 - 08 3 THOSE TRANSACTIONS WERE NOT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. ASSESSEE FURTHER ADMITTED TO PAY THE TAX IN RESPECT OF UNRECORDED TRANSACTIONS. ON THE BASIS OF THE ENQUIRY MADE BY THE A.O , I T WAS NOTI CED THAT ASSESSEE USED TO SELL JARI KASAB OUTSIDE THE BOOKS TO THE PARTIES AND THE PARTIES IN TURN USED TO DEPOSIT MONEY IN THE BANK ACCOUNT WHICH THE ASSESSEE U SED TO WITHDRAW THROUGH ATM FACILITY. A.O ALSO NOTICED THAT THE AVERAGE GROSS PROFIT OF THE ASSESSEE IN THE EARLIER 3 ASSESSMENT YEARS WAS 29.73% BUT HOWEVER ASSESSEE SUBMITTED THAT THE GP RATIO IN RESPECT OF UNACCOU NTED TRANSACTION OF TRADING OF J ARI WA S APPROXIMATELY 12 TO 14% AND T HEREFORE IT WAS SUBMITTED THAT THE GP AT 12 TO 14% BE CONSIDERED. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE A.O. HE ACCORDINGLY WORKED OUT THE PROFIT FROM UNRECORDED BUSINESS TRANSACTION ON THE BASIS OF A VERAGE GROSS PROFIT OF 29.73% AT RS . 15,74,375 / - AND ADDED IT TO THE INCOME . A.O ALSO NOTICED THA T ASSESSEE HAD MADE CERTAIN SHARE TRANSACTIONS FROM WHICH ASSESSEE HAD EARNED PROFIT OF RS. 14,677/ - AND WERE NOT DISCLOSED BY THE ASSESSE E. A.O CONSIDERED IT TO BE INCOME OF THE ASSESSEE AND ADDED TO THE INCOME. FURTHER ON VERIFIC ATION OF THE DEMAT ACCOUNT OF THE ASSESSEE , H E NOTICED THAT ASSESSEE WAS HAVING STOCK OF 171 SHARES OF LANCO INFRATECH LTD. WHICH WAS ALLOTTED TO HIM ON 23.11.2006 AND THE VALUE OF S HARES WAS RS . 99 PER SHARE. SI N C E THIS INVESTMENT WAS NOT DISCLOSED IN THE REGULAR BOOKS OF ACCOUNTS , A.O CONSIDERED THE VALUE OF SUCH INVES TMENT OF RS. 16,929/ - AS UNDISCLOSED INVESTMENT AND ADDED TO THE TOTAL INCOME U/S 69B OF THE ACT. AGGRIEVED BY THE O RDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE GRANTED PARTIAL RELIEF TO THE ASSESSEE BY HOLDING AS UNDER: - 3.2 I HAVE DULY CONSIDERED THE DISCUSSION MADE IN THE ASSESSMENT ORDER AND THE SUB MISSION MADE BY THE APPELLANT. IN SO FAR AS THE AMOUNT OF TRANSACTIONS APPEARING IN THE ABOVE BANK ACCOUNTS ARE CONCERNED, WHEREIN TOTAL CASH TRANSACTIONS OF RS. 54,79,900/ - ARE APPEARING, THE SAME IS NOT DISPUTED. HOWEVER, THE ITA NO 1413/AHD/2011 . A.Y. 2007 - 08 4 APPELLANT HAS STATED THAT TH E AMOUNT OF RS. 21,40,330/ - TAKEN BY THE ASSESSING OFFICER AS CASH DEPOSITED IN THE KARUR VYSYA BANK LTD. IS NOT CORRECT, AS THE SAID AMOUNT IS NOT DEPOSIT BUT WITHDRAWALS MADE AND THE CASH DEPOSITED IN THE STANDARD CHARTERED BANK, COIMBATORE A ND KARUR VYSYA BANK LTD. IS ONLY TO THE EXTENT OF RS. 10,57,040/ - AND RS. 22,82,530/ - RESPECTIVELY. THUS, THE TOTAL AMOUNT OF CASH DEPOSITS IN THE ABOVE BANK ACCOUNTS, AS PER THE CONTENTION OF THE APPELLANT IS NOT RS. 54,79,900/ - ,BUT RS. 33,39,630// - UPON PERUSAL OF THE TRANSACTIONS APPEARING IN THE ABOVE BANK ACCOUNTS, THE SAID CONTENTION OF THE APPELLANT IS FOUND CORRECT THAT THE AMOUNT OF RS. 21,40,330/ - IS WITHDRAWAL MADE FROM KARUR VYSYA BANK LTD., WHEREIN CASH DEPOSITS OF RS. 22,82,530/ - HAS BEEN MADE DURING THE YEAR. THEREFORE, THE CASH DEPOSITS RELATING TO UNRECORDED BUSINESS IS CONSIDERED AT RS. 33,39,500/, AS AGAINST RS. 54,79,900/ - TAKEN BY THE ASSESSING OFFICER. THE MAIN ISSUE INVOLVED IN THIS GROUND OF APPEAL IS AS TO WHAT RATE OF G.P. SHOULD BE ADOPTED FOR COMPUTING THE G.P. ON THE ABOVE UNRECORDED TRANSACTIONS OF JARI KASAB. THE ASSESSING OFFICER HAS TAKEN AVERAGE OF G.P. FROM A.Y.2005 - 06 TO 2007 - 08, WHICH IS AT 29.73%. THE APPELLANT'S CONTENTION IS THAT THE GROSS PROFIT RELATING TO TRADING ACT IVITY OF'JARI KASAB SHOULD BE ADOPTED AND NOT OF MANUFACTURING ACTIVITY. I FIND FORCE IN THE CONTENTION OF THE APPELLANT, AS IT IS NOT DISPUTED BY THE ASSESSING OFFICER THAT THE APPELLANT IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF JARI KASA B AND HAS A SMALL UNIT COMPRISING ONE GILDING MACHINE ON WHICH THE JARI KASAB IS BEING GILDED TO MAKE IT AS FINISHED MARKETABLE PRODUCT. FURTHER, THE ASSESSING OFFICER HAS NOT DISPUTED THAT THE APPELLANT HAD DONE SOME TRADING ACTIVITY BY PURCHASING THE REA DY MATERIAL TO SUPPLY TO HIS CLIENTS AT COIMBATORE, ERODE AND CHIRALA AND SINCE THIS TRADING WAS EFFECTED THROUGH A LOCAL SELLER ON PROMPT CASH BASIS, HE HAD OPENED A BANK A/C. WITH STANDARD CHARTERED BANK AND KARUR VYSYA BANK LTD. WITH CORE BANKING FACILI TY, AND THE GOODS PURCHASED FROM THE LOCAL MARKET WERE DELIVERED TO VARIOUS CLIENTS AT THE ABOVE STATIONS WHO WERE ALSO INSTRUCTED TO DEPOSIT THE AMOUNT OF CONSIGNMENT IMMEDIATELY IN HIS BANK A/C, WITH THE ABOVE TWO BANKS. THE APPELLANT'S SUBMISSION, THERE FORE, IS THAT G.P. APPLIED BY THE ASSESSING OFFICER IS PERTAINING TO THE MANUFACTURING ACTIVITY OF JARI, WHEREAS THE AMOUNT OF CASH DEPOSITS APPEARING IN THE UNDISCLOSED BANK ACCOUNTS RELATE TO PURCHASE AND RE - SALE OF JARI KASAB TO OUTSIDE PARTIES, THAT IS TRADING ACTIVITY. THE ASSESSING OFFICER HAS NOT CONTRADICTED THIS STATEMENT ON OATH GIVEN BY THE APPELLANT. HE HAS, IN PARA 4 OF THE ORDER, ONLY DISMISSED THE SUBMISSION OF THE APPELLANT THAT THE G.P. ON THE UNRECORDED TRANSACTION OF JARI KASAB SHOULD BE TAKEN BETWEEN 12% TO 14% ON THE GROUND THAT THE SUBMISSION HAS BEEN MADE AS AN AFTER THOUGHT, WHEREAS AS DISCUSSED IN PARA 3 OF THE ORDER, THE APPELLANT HAD AGREED TO PAY TAX ON THE G.P. RATIO OF HIS BUSINESS. UPON VERIFICATION OF THE STATEMENT OF THE APPE LLANT RECORDED BY THE ASSESSING OFFICER, IT IS SEEN THAT IN REPLY TO QUESTION NO.8, THE' APPELLANT STATED THAT PURCHASE AND SALE OF JARI KASAB TRANSACTIONS FOUND IN THE ABOVE TWO BANK ACCOUNTS HAVE NOT BEEN RECORDED IN HIS BOOKS OF A/C, AND HE IS PREPARED TO PAY TAX ON THE GROSS PROFIT ON THE ABOVE TRANSACTIONS. IT IS, THUS, SEEN THAT THE APPELLANT HAS NOT ADMITTED TO MAKE PAYMENT OF TAX ON THE ABOVE TRANSACTIONS, AT THE AVERAGE OF GROSS PROFIT OF THE LAST THREE YEARS. IN VIEW OF THE SAME, I HOLD THAT THE G ROSS PROFIT RELATING TO MANUFACTURING ACTIVITY OF THE APPELLANT CANNOT BE APPLIED ON THE UNRECORDED TRANSACTIONS RELATING TO PURCHASE AND SALE OF JARI KASAB. I, THEREFORE, FURTHER HOLD THAT THE G.P. @ 15% ON THE ABOVE NATURE OF BUSINESS WILL BE APPROPRIATE TO MEET THE ENDS OF JUSTICE AND DIRECT THE ASSESSING OFFICER TO ADOPT G.P. @ 15% ON THE CASH DEPOSITS OF RS. 33,39,630/ - IN THE BANK ACCOUNTS OF STANDARD CHARTERED BANK AND KARUR VYSYA BANK LTD. AND, ACCORDINGLY, TAX THE SAID AMOUNT OF G.P. OF RS. 5,00,93 6/ - AS UNDISCLOSED INCOME OF THE APPELLANT DURING THE YEAR. THE APPELLANT'S ALTERNATE SUBMISSION THAT THE G.P. @ 5%, AS PER THE PROVISIONS OF SECTION 44AF SHOULD BE TAKEN IS REJECTED FOR THE REASON THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE APPE LLANT HAS HIMSELF STATED THAT HE IS MAINTAINING REGULAR BOOKS OF A/C., HOWEVER, THE TRANSACTION IN THE ABOVE TWO BANK ACCOUNTS ARE NOT RECORDED. MOREOVER, THE APPELLANT IS ENGAGED IN THE MANUFACTURING BUSINESS OF JARI KASAB, WHEREAS THE PROVISIONS OF SECTI ON 44AF ARE APPLICABLE ONLY TO THOSE ASSESSEES WHO ARE ENGAGED IN RETAIL TRADING. THE FIRST GROUND OF APPEAL IS, THEREFORE, PARTLY ALLOWED. 3.4 THE THIRD AND FOURTH GROUNDS OF APPEAL ARE AGAINST THE ADDITIONS OF RS. 14,677/ - ON ACCOUNT OF PROFIT ON UNRECOR DED SHARE TRANSACTIONS AND RS. 16,929/ - MADE U/S 69B OF THE ACT. THE APPELLANT S SUBMISSION ON THESE GROUNDS OF APPEAL IS COMMON THAT SEPARATE ADDITION SHOULD NOT BE MADE, AS PROFIT OF HIS BUSINESS STANDS ALREADY ESTIMATED. THIS SUBMISSION OF THE APPELLANT IS NOT ACCEPTABLE, AS HE HAS NOT CO - RELATED THE PROFIT EARNED FROM UNRECORDED BUSINESS VIS - A - VIS PROFIT FROM SHARE TRANSACTIONS AND INVESTMENT IN UNDISCLOSED SHARES. THE APPELLANT HAS HIMSELF ADMITTED THAT THE BUSINESS OF PURCHASE AND RE - SALE OF JARI KASAB WAS A SEPARATE BUSINESS AND THE TRANSACTION INVOLVED THEREIN ONLY RELATED TO THAT BUSINESS. DURING THE COURSE OF APPELLATE PROCEEDINGS OR IN HIS STATEMENT RECORDED ON OATH, HE HAS NOT CO - RELATED THE ABOVE INVESTMENTS WITH PROFIT FROM UNDISCLOSE D BUSINESS. I, THEREFORE, DO NOT FIND ANY MERIT IN ITA NO 1413/AHD/2011 . A.Y. 2007 - 08 5 THIS SUBMISSION OF THE APPELLANT AND DISMISS THE SAME, AND CONFIRM THE ABOVE ADDITIONS. BOTH GROUNDS OF APPEAL ARE, ACCORDINGLY, DISMISSED. 6. BEFORE US, LD. A.R. SUBMITTED THAT ASSESSEE IS ENGAGED IN THE BU SINESS OF MA NUFACTURING OF JARI KASAB BUT D URING THE YEAR APART FROM MANUFACTURING , ASSESSEE DONE TRADI NG ACTIVITY BY PURCHASING READY - MADE MATERIAL AND SELLING IT TO HIS CLIENTS LOCATED AT COIMBATORE, ERODE ETC . T HE PURCHASES WERE MADE BY THE ASSESSEE FR OM LOCAL SELLERS BY MAKING PROMPT CASH PAYMENTS. ASSESSEE HAD ALSO OPENED BANK ACCOUNTS WITH BANKS HAVING CORE BANKING FACILITY. THE GOODS PURCHASED FROM LOCAL MARKET WAS DELIVERED TO VARIOUS CLIENTS AND THE CLIENTS WERE INSTRUCTED TO DEPOSIT THE AMOUNT OF SALES IN THE BANK ACCOUNT IMMEDIATELY SO AS TO FACILITATE THE ASSESSEE TO PAY FOR THE PURCHASES. BEFORE US IT WAS SUBMITTED THAT I N THE BUSINESS OF SUCH TRADING ACTIVITY , THE MARGIN OF PROFIT IS AROUND 1 TO 1.5%. THE TRANSACTIONS OF THE BANKS WHICH HAVE B EEN CONSIDERED BY THE A.O RELATE S TO ONLY TRADING TRANSACTIONS BUT T HE GROSS PROFIT CONSIDERED BY THE A.O IS WITH RESPECT TO MANUFACTURING ACTIVITIES. THE LD. A.R. FURTHER SUBMITTED THAT THE GROSS PROFIT CONSIDERED BY THE A.O AND WHICH HAS BEEN UPHELD BY C IT(A) IS WITH RESPECT TO MANUFACTURING ACTIVITY AND SINCE THE BANK ACCOUNT PERTAIN TO T RADING ACTIVITY , THE GROSS PROFIT RATIO OF MANUFACTURING ACTIVITY CONSIDERED FOR THE WORKING OUT THE PROFITS FROM TRADING ACTIVITY IS INCORRECT . HE FURTHER SUBMITTED THA T THE VOLUME OF TRADING ACTIVITY DONE BY THE ASSESSEE WAS LESS THAN THE LIMIT OF TURNOVER PRESCRIBED U/S 44AF AND THEREFORE THE PROFIT SHOULD BE CONSIDERED AT 5% P RESCRIBED U/S 44AF . THE LD A.R. FURTHER SUBMITTED THAT ONCE THE PROFIT HAS BEEN ESTIMATED ON THE BASIS OF THE TOTAL TURNOVER , ADDITION MADE ONCE AGAIN ON ACCOUNT OF THE SHARE TRANSACTION AND ON ACCOUNT OF INVESTMENT MADE FROM THE AFORESAID BANK ACCOUNT AMOUNTS TO DOUBLE ADDITION OF THE SAME INCOME AND THEREFORE THE ADDITION OF RS. 14,677/ - AND ITA NO 1413/AHD/2011 . A.Y. 2007 - 08 6 RS . 16,929/ - MADE BY THE A.O AND UPHELD BY LD CIT(A) BE DELETED. THE D .R. ON THE OTHER HAND RELIED ON THE ORDER OF A.O AND CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT DURING THE YEAR CASH T RANSACTIONS AGGREGATING TO RS. 54,79,900/ - WAS FOUND IN THE BANK ACCOUNT. CIT(A) AFTER VERIFICATION OF THE STATEMENTS AND SUBMISSIONS OF ASSESSEE HAS GIVEN A FINDING THAT OF THE TOTAL TRANSACTIONS OF RS. 54,79,900/ - WHICH HAS BEEN CONSIDERED BY THE A.O , TH E CASH DEPOSITED ARE ONLY RS. 33,39,630/ - ( AMOUNTS DEPOSITED IN STANDARD CHARTERED BANK AND KARUR VYSYA BANK LTD.) . HE HAS FURTHER GIVEN A FINDING THAT THE AMOUNT OF 21,40,330/ - IS THE WITHDRAWALS MADE FROM KARUR VYSYA BANK LTD AND THUS THE TOTAL DEPOSIT S RELATING TO BUSINESS IS RS. 33,39,500/ - . THE AFORESAID FIDING OF CIT(A) HAS NOT BEEN CONTROVERTED BY REVENUE . WE FIND THAT A.O ON THE AGGREGATE CASH TRANSACTIONS OF RS. 54,79,900/ - HAS ADOPTED THE AVERAGE RATE OF GROSS PROFIT OF LAST 3 YEARS AT 29.73% A ND MADE AN ADDITION OF RS. 15,74,375/ - AND THE ADDITION IS ON THE BASIS OF ESTIMATION. LD CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE FOUND THE GP RATE ADOPTED BY THE A.O TO BE ON HIGHER SIDE AND THEREFORE RESTRICTED THE GP AT 15% AGAIN ON A N ESTIMATE BASIS. BEFORE US, IT IS ASSESSEES SUBMISSION THAT THE TURNOVER OF THE TRADING TRANSACTION WERE BELOW RS. 40 LACS AND THEREFORE CONSIDERING THE PROVISION OF SECTION 44AF THE PROFIT RATE AT 5% SHOULD BE APPLIED. APART FROM MAKING THE ABOVE CONTENT ION , NO MATERIAL HAS BEEN PLACED ON RECORD BY THE ASSESSEE IN ITS SUPPORT. CONSIDERING THE TOTALITY OF THE FACTS , WE FIND FORCE IN THE CONTENTION OF LD. A.R. THAT THE PROFIT OF MANUFACTURING ACTIVITY CANNO T BE APPLIED TO THE TRANSACTION OF TRADING ACTIVITY BUT AT THE SAME TIME WE FIND THE ASSESSEE HAS ALSO NOT PLACE ANY MATERIAL ON RECORD TO DEMONSTRATE THE GROSS PROFIT EARNED BY IT AND A.O AND ITA NO 1413/AHD/2011 . A.Y. 2007 - 08 7 CIT(A) HAS ALSO MADE ADDITION ON ESTIMATED BASIS. WE THEREFOR E FEEL THAT THE ENDS OF JUSTICE SHALL BE MET IF THE ADDITION IS RESTRICTED AT 8% OF THE CASH DEPOSITS OF RS. 33,39,500/ - ( WHICH H AS BEEN DETERMINED BY CIT(A)) . FURTHER SINCE THE ADDITION HAS BEEN ESTIMATED , WE ARE OF THE VIEW THAT SEPARATE ADDITION OF RS . 14,677/ - AND RS. 16,929/ - IS UNCALLED FOR AND THAT THE ADDITION @ 8% WILL TAKE CARE OF THOSE ADDITIONS. WE THUS DIRECT ACCORDINGLY . THUS THESE GROUNDS ARE PARTLY ALLOWED. 8. I N THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPE N COURT ON 19 - 09 - 201 4 . SD/ - SD/ - (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE OR DER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR IT AT,AHMEDABAD